Posted
by
Zonk
on Thursday September 20, 2007 @03:03PM
from the extra-tax-for-awesomeness dept.

An anonymous reader writes "Is it just me or is the UK iPhone deal seriously more expensive than the US deal? If you look at what AT&T offers compared to what O2 offers, you get significantly less for your money in the UK than you do in the States. It's also significantly more expensive than other non-iPhone deals in the UK, which offer similar services. Steve Jobs response to the more expensive UK iPhone is that 'it's more expensive to do business in the UK', but what does that mean? As a UK resident I'm disappointed that we didn't get the same plan as the AT&T plan, particularly the free mobile-to-mobile calls. Is there some element of the UK iPhone service that I'm missing here?"

Consumer Protection Laws are far more rigorous [tradingstandards.gov.uk] in the UK than the US.

I'm American but have lived in London for ten years. Yes, (some) things are more expensive here. I was curious and looked into it. Excepted from the above link:

When you buy goods from a trader, such as a shop, market stall, garage, etc, you enter into a contract, which is controlled by many laws including, the Sale of Goods Act 1979 (as amended by the Sale & Supply of Goods Act 1994 and the Sale and Supply of Goods to Consumers Regulations 2002). The law gives you certain implied, or automatic, statutory rights, under this contract.

The Sale of Goods Act 1979 (as amended) says that goods should be :

Of satisfactory

Fit for the purpose

As described

Store policies don't matter; this is the law and retailers must incorporate this cost into selling prices.

Last I read the UK average wage was around £25k ($50k) a year, and the US average wage was around $40k a year. I'd hazard that was due to poor states dragging the average down?

However once you take tax into account then what you say is true. I don't know what US income tax rates are, and I know US goods have (~8%) sales tax applied over the sticker price unlike here, but with the UK's 22% income tax (not including first £5k earnings) plus 12% National Insurance, and then 17.5% VAT on most goods that you buy... it works out that of the average wage around 40 - 50% is going straight to the government. If it was earlier I'd probably do the maths more concisely.

I doubt that an arbitrary wireless plan in the US can be compared to an arbitrary wireless plan in Europe. For instance, the ATT plan allows free roaming around an approximately 3 million square mile area, as well as roll over minutes, and lots of free times. Saying that a UK plan does not offer such luxuries or that the US plan is cheaper makes no sense as the market features are not the same.

There is nothing special about a Mac or iPhone or iPod. The Mac provides me a great deal of value, so I buy it. The iPhone does not provide the value that the additional costs would warrant, so I won't buy one. I think people miss this simple point when they complain about the price drop of the iPhone. Current users effectively spent $2000 for the phone. This amount of money meant that the phone must have had some significant value to them, especially those that bought the first week. The $200 discount then represents a mere 10% discount, and 10% is an exceptional price to become an early adopter. I was not an early adopter my normal tolarance for contracted costs is about a third of what Apple and ATT wanted.

I hope we don't have to endure another year of moaning about the cost of the phone, or the cost of the plan, or the cost of early adoption. Those who have it find some value in it, and that is really all there is to it. Apple sells expensive machines, and those that need or want them buy them. Those that do not don't. If one needs or wants an iPhone, the costs will be worth it. Otherwise buy something else and apple will out the costs until it is low enough to attract the expected number of consumers.

From at least one US state, yes -- Hawaii. I can't offhand think of any European state with no land boundary (the UK has a land boundary with the Republic of Ireland, of course), but somebody with better knowledge of geography than me will no doubt be able to think of one.